Lowest Spread Forex Brokers For Cross Pairs
On any trading platform, there are two prices for each financial instrument – the Bid and the Ask. When buying or going long, traders use the Ask Price, while the Bid Price is used for selling or going short. The difference between the Bid and Ask Price represents the spread. It is an income for the broker (fee), which is also a cost for the trader. Therefore, a lower spread would be much better for traders.
Besides offering the lowest spread on several popular Major Currency Pairs, some brokers also offer their lowest spread for Cross Pairs. Though these pairs are not as popular as Major Currency Pairs, some traders are willing to trade them because they provide bigger volatility. If you are interested in trading Cross Currency pairs, these lowest spread forex brokers for Cross Pair could be helpful.
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Why do scalpers need low spreads?
A scalper can open and close 30 positions in a day. Say the broker charges a spread of 3 pips for every position, the profit average is 5 pips, the loss average is 3 pips, and the scalper makes 20 winning trades and 10 losing trades. The total profit and loss without the spread are:
(20 x 5) - (10 x 3) = 70 pips
If the spread is charged:
((20 x 5) - (10 x 3)) - (30 x 3) = -20 pips
The result is disappointing, right? Although they have made twenty profitable trades, the total profit/loss turns to minus once the spread is applied.
Continue Reading at The Secrets of Successful Scalping Strategy
How to make a profit trading in cross pairs?
One way to get profitable with cross pairs is to find the highly correlated ones. Some currency pairs might be tied together because of certain world events. For example, EUR/GBP is a great pair to trade during the ongoing Brexit saga. In 2016, the Brexit vote increased the pair by 13% for 2-weeks. Such momentum can be very helpful when you trade with cross currency pairs.
Continue Reading at Best Forex Brokers to Trade Cross Currency Pairs
Why is it important for day trader to choose low spread broker?
Given the importance of spreads in day trading, it is essential to find a broker that offers low spreads. Lower spreads can help day traders reduce their trading costs, which in turn can lead to increased profits.
It is noteworthy that IC Markets stands out in this regard because it offers lower spreads compared to its counterparts. For instance, the average spread on the EUR/USD for IC Markets' standard account is around 0.62 pips while FP Markets' is around 1.2 pips.
Continue Reading at Broker for Day Trading: FP Markets or IC Markets?
What are the most traded cross pairs?
Most traded cross currencies involve JPY, which are AUD/JPY, GBP/JPY, EUR/JPY, and so on. The reason is that trading against JPY creates interest rate gaps which could result in more profits.
Another most traded cross currency is EUR/GBP. Both represent some of the largest economies in the world, so it makes sense that many people trade them. However, cross currency pairs relatively have small daily movements compared to major currencies, and so forex traders usually ignore them.
Continue Reading at Currency Pairs Characteristics in the Forex Market
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